NERC to hike electricity tariff from Dec

Nigerian Electricity Regulatory Commission (NERC) may review upward the electricity tariff with effect from December 1, 2014.

The sudden ‎development may be the result of the gas price increase to $3.30 as against the regulatory authorities’ assumption of $2.30.

Vice Chairman of NERC, Muhammad Lawal Bello, while speaking during a presentation in Abuja, Thursday at the review of basic assumptions for semi-annual review of Multi Year Tariff Order (MYTO2) revealed a $1.00 difference from the assumption and the actual price of gas.

He noted that though tariff review is a very sensitive issue to the consumers, the way to go is to pay what is due to ensure improvement in the sector.

“From what I have seen in the initial report, not much has changed. The tariff review is a sensitive issue to the consumer who considers paying higher and not seeing improvement in electricity supply as inappropriate. But there is a general consensus that the way to go is paying what is due so that power will begin to improve,” he said.

Based on the changes in some assumption parameters, such as inflation rate, exchange rate, gas price and generation capacity, there may be an upward adjustment to the tariff.

NERC has also declared that the sector is challenged with what will be the direction of such variables as inflation, foreign exchange rate in 2015, and whether generation companies and their gas suppliers guarantee increased generation under the new gas price.

Also speaking, Mr. Roland Achor, Tariff and Rates, NERC, noted that the actual price at the moment is $3.30 as against the assumption of $2.30 by NERC in the MYTO methodology assumptions, adding that gas price has been regulated since the adoption of the MYTO in 2008 and the regulated prices are applied in the 2012-2016 price regime.

According him, the regulated gas price for 2014 is $1.80/mmbtu. However, the Ministry of Petroleum and NERC have agreed to a gas price of $2.50/mmbtu and transportation cost of $.80 effective December 2014.

Also, there is the gas price assumption of $2.30 by NERC, which actual price has risen to $3.30 resulting in a difference of $1.00, which is expected to impact on the final aggregate technical commercial and collection losses (ATCC & C) review which takes effect December 1, 2014.

MYTO methodology is done based general assumptions to Disco retail tariff such as inputs to the tariff, forecast of load, capacity, fuel costs, investment, levels of losses, customer numbers, and M costs and other economic and technical data, which are all correlated to arrive at the retail tariff to the consumers.

He said the inflation rate received from the Central Bank of Nigeria (CBN) shows a figure of 8.3 per cent as at September 30, 2014 but the inflation rate at the last minor review was 7.8 per cent even though MYTO 2 has an assumption of 13 per cent inflation rate, stressing that the effective inflation rate is now pegged at 8.3 per cent.

He explained that effective exchange rate is now N156.29 to $1.00 over the next six months, adding that the retail tariff will be based on generation of 3,675MW throughout the period from December 1, 2014 to May 31, 2015, though the gross capacity was estimated to be 5,556MW. 

Extract: http://sunnewsonline.com/new/?p=91945

Statistical association seeks review of crude oil laws

The Nigerian Statistical Association (NSA), has called on the Federal Government to review existing laws relating to crude oil sales data collation process and those relating to transactions in the Free Trade Zones.

The association said this will enable the country get reliable statistical data on all trade transactions on export commodities for effective planning and economic development.

Making the call recently in a lecture delivered to mark the African Statistics Day in Abuja, President of the NSA, Dr. Muhammed Tumala, said current laws were inhibiting open data production and denying the country the opportunity of knowing the actual volume and values of transactions on key sectors of the economy.

Tumala, who spoke on the topic, “Open Data for Accountability and Inclusiveness: Prospects and Challenges for Nigeria”, noted that even though the Statistics Act 2007 established the Nigerian Statistical System with coordination by the National Bureau of Statistics (NBS), translating the provisions of the Act to national economic advantage remains a challenge as other systems and processes for open data are still lacking.

For instance, he explained that while demographic data is still being produced and managed outside the coordination of NBS, data production also remained too scanty in terms of functional and sectional coverage thereby making it difficult for planners and data users to have access to a comprehensive data on most sectors of the economy.

On the need to review the FTZs and other export trade laws, particularly those relating to crude oil lifting, the NSA President noted that exclusion of the Nigeria Customs Service (NCS) from assessing the oil lifting transactions and those of entities operating in the FTZs continued to raise questions about the validity of statistical figures on such trade being bandied by the government.

He said: “The importance of data in policy making cannot be overemphasised and all open data says is that such data should now be available to everyone that would either want to undertake research or carry out business decisions or design policies. That is what open data is saying.

“It is for citizens to insist on accountability and if they are to be accountable there is no other way of expressing accountability other than using data. It is for the media to also educate both the public on the need to use facts to hold public officers responsible for their actions.

“Such laws and policies on the FTZs and those that inhibit effective statistical data collation on all facets of our national life should be reviewed and amended. For instance, the exclusion of oil trade from the responsibility and activity of the Nigeria customs is one of such laws. There is no country in the world that does that.

“By doing that, you are unable to capture your trade data in that sector and unfortunately for Nigeria, over 90 per cent of our external trade is based on that sector. You can imagine that when over 90 per cent of your trade data is questionable then your entire data is questionable,” the NSA President added.

Extract: http://sunnewsonline.com/new/?p=91947

Nigerian tycoons lead Africa’s 50 richest in 2014

For the first time in the four years that FORBES has been tracking Africa’s richest, Nigeria beats South Africa. At the top yet again cement tycoon Aliko Dangote of Nigeria is joined on the list of Africa’s 50 Richest by 12 other countrymen. In comparison South Africa claims 11 spots, down from 14 a year ago. Nigeria is showing its strength, having earned commendations for its efforts to snuff out Ebola in the country, which Dangote helped fund and despite a recent drop in oil prices.

Three new billionaires that joined the list include Orji Uzor Kalu of Nigeria, Tony Elumelu of Nigeria and King Mohammed VI of Morocco. Three billionaires on last year’s list are no longer members of the 10-figure club: Vimal Shah of Kenya is off the list, replaced by his father Bhimji Depar Shah at a lower net worth. Abdulsamad Rabiu of Nigeria dropped below $1 billion due to ceased operations at his floating cement terminal in Nigeria. And South African mining mogul Desmond Sacco dropped to a net worth of $680 million, down from $1.4 billion last year, because of a sharp decline in the share price of his mining firm Assore Group. The net result: the number of billionaires on the list stayed steady with 2013 at 27.

Africa’s 50 richest are, as a whole, wealthier than a year ago. Their combined net worth of $110.7 billion is 6.7 per cent more than in November 2013. The minimum net worth needed to join this elite group rose to $510 million, up from $400 million a year ago.

Behind Aliko Dangote at number one with a fortune of $21.6 billion, comes South African luxury goods magnate Johann Rupert, number two for the second year in a row, worth an estimated $7.3 billion. His Compagnie Financiere Richemont has a stable of luxury brands including Cartier, Montblanc and fashion house Azzedine Alaia.

Six newcomers join the list of richest Africans, including the above mentioned new billionaires, as well as Ali Wakrim of Morocco and Ahmed Ezz of Egypt. Mohamed Bensalah of Morocco rejoins the list after dropping off in 2013. Seven members of the 2013 list fell off: Vimal Shah of Kenya (as mentioned earlier, his father Bhimji replaced him), Cyril Ramaphosa of South Africa, Raymond Ackerman of South Africa, Sani Bello of Nigeria, Adrian Gore of South Africa, Shafik Gabr of Egypt, and Alami Lazraq of Morocco.
Extract: http://sunnewsonline.com/new/?p=91951

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John Lewis warns prices 'likely' to rise on 'Yes' vote

Prices in Scottish branches of John Lewis and Waitrose may be higher than in the rest of the UK if the country votes "Yes" to independence.

The chairman of the John Lewis said it was "most probable" that prices will rise, with costs passed on to customers.

Sir Charlie Mayfield said there were "economic consequences to a 'Yes'".

On Thursday, the partnership, which includes Waitrose, posted a 12% jump in pre-tax profits.

Sir Charlie said: "It does cost more money to trade in parts of Scotland, and therefore those higher costs in the event of a 'Yes' vote are more likely to passed on ...

"When we are talking about two separate countries it is most probable that retailers will start pricing differently."

In response to the comments, the Scottish finance secretary John Swinney said: "Charlie Mayfield is entitled to his opinion.

"I think the argument is one that is firmly contested by other retailers who do not take the view that has been expressed this morning by Charlie Mayfield."
'Challenging'
While overall profits at the partnership were up 12% at £129.8m, operating profits at Waitrose fell 9.4% due to new store openings.

Waitrose opened 15 more branches in the UK, 11 more than in the same period last year.

Sales at Waitrose rose 1.3% and 8.2% at John Lewis.

John Lewis' click and collect service increased in popularity, up 25.6%, and now accounting for 30% of all merchandise sold.

The partnership said outlook for food was "challenging" but other parts of the business were "more positive than has been the case for several years".
Asda too
Asda has also warned that a "Yes" vote could have an impact on their prices.

Andy Clarke, president and chief executive of Asda said: "If we were no longer to operate in one state with one market and - broadly - one set of rules, our business model would inevitably become more complex. We would have to reflect our cost to operate here.

"This is not an argument for or against independence, it is simply an honest recognition of the costs that change could bring."

Link: http://www.bbc.com/news/business-29153022

Nigeria Economy Resisting Ebola, Finance Minister Says

Ngozi Okonjo-Iweala, Nigeria's finance minister.

The Ebola outbreak in West African countries is not seriously affecting the Nigerian economy, Finance Minister Ngozi Okonjo-Iweala said.

Nigeria, Africa’s biggest economy, has recorded 21 cases of the virus, and eight people have died within its borders, according to the World Health Organization. There were no current confirmed cases as of Sept. 10, the health ministry says.

“We have a team monitoring the economic impact and we don’t feel we are yet at the point where we can say it’s having a huge impact on the economy,” Okonjo-Iweala said in an interview with Bloomberg TV Africa late yesterday. “There’s been some fall-off in hotel occupancy, in Lagos in particular, some meetings have been postponed, but you still have other businesspeople who are arriving.”

Ebola has killed at least 2,288 people in Guinea, Liberia and Sierra Leone, countries on Africa’s Atlantic coast that don’t border Nigeria. On Sept. 9, the parent of Nigeria’s biggest company, Dangote Cement (DANGCEM), said it was postponing a planned investor day in Lagos, the commercial hub, as a result of Ebola-related travel fears.

Okonjo-Iweala also said that the country’s Excess Crude Account, where a portion of oil revenue is stored to cushion the economy against volatility, stands at $4.11 billion. That’s the same level as reported by ThisDay newspaper in July.

Vulnerable Economy

The minister said in January she was concerned that a decline in the account balance to about $2.5 billion at that time had left the economy “vulnerable” and should be redressed this year.

The country plans to open the Development Bank of Nigeria in the next six to nine months. The lender will initially be capitalized with $2 billion, a figure that may rise to as much as $10 billion, and fill a gap in Nigerian business lending, the minister said.

“It’s very difficult for businesspeople, especially small and medium-sized enterprises, to find any money for five years, seven years,” she said. “Mostly they can borrow for a year to three years. If you want to build a business sustainably and you want your economy to have sustained growth you’ve got to fix access to finance.”

The development bank will be partly financed by the Nigerian government, and is also due to receive $500 million each from the World Bank and the African Development Bank, and a credit line from the German development bank, KfW Group, she said.

“It’s going to be strong and get rated,” she said.

Debt Risks

Referring to recent African Eurobond issues, Okonjo-Iweala said governments should exercise discipline in borrowing. She negotiated debt relief for Nigeria from the Paris Club group of creditors in 2005 during her first stint as finance minister.

“It has to be investment with high returns to justify the borrowing, but even then I would be very cautious and I think on the continent we shouldn’t get too enamored with floating these bonds,” she said.
 
African nations from Senegal to Kenya have sold sovereign debt this year as borrowing costs dropped to a 15-month low in August, according to JPMorgan Chase & Co. indexes. The West African nation of Ghana said yesterday it had sold $1 billion of bonds due January 2026 that were priced to yield 8.25 percent.

“We have to watch it so we don’t find ourselves as a continent back in the situation we were in before,” the minister said. “Each time you go to float these Eurobonds you should do it making sure you get reasonable yields. I’m not one to say, let’s rush out and accumulate a lot of debt, maybe because of my experience trying to get debt relief.”

Link: http://www.bloomberg.com/news/2014-09-11/nigeria-economy-resisting-ebola-finance-minister-says.html

Nigeria’s Enterprise Bank Set for Local Buyer After Bids

Enterprise Bank Ltd., the Nigerian lender taken over by the state in 2011, may be sold to a unit linked to Heritage Banking Co., with a second local institution next in line.

While HBC Investment Services is the preferred buyer, Nigeria’s Fidelity Bank Plc (FIDELITY) is the “reserve bidder for the acquisition of the entire issued and fully paid up ordinary shares of Enterprise Bank,” the Asset Management Corp., or Amcon, said in a statement yesterday.

“This process started with interest shown by 24 parties cutting across local and international bidders,” said Amcon, which is based in the capital, Abuja. The sale is being coordinated by a unit of Citigroup Inc. (C) and Vetiva Capital Management Ltd., it said.

Amcon was set up in 2010 to buy bad loans and took over three of the eight lenders it rescued as part of a 620 billion-naira ($3.8 billion) bailout. It has been preparing the sales of distressed assets held by Enterprise, Mainstreet Bank Ltd. and Keystone Bank Ltd. for the past three years, with Enterprise the first to be put up for sale.

Enterprise resumed operations in August 2011 “as a full-service commercial bank with a national banking license,” Amcon said. It has 160 branches and 177 automated teller machines in Africa’s largest economy with a population of more than 170 million people.

Link: http://www.bloomberg.com/news/2014-09-12/nigeria-s-enterprise-bank-set-for-local-buyer-after-bids.html